NOTES TO FINANCIAL STATEMENTS
30 June 2015
Annual Report 2015
Karin Technology Holdings Limited
71
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
REVENUE RECOGNITION
Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the
revenue can be measured reliably, on the following bases:
(a)
from the sale of goods, when the significant risks and rewards of ownership have been transferred to the
buyer, provided that the Group maintains neither managerial involvement to the degree usually associated
with ownership, nor effective control over the goods sold;
(b)
from the rendering of services, when the services have been rendered;
(c)
rental income, on a time proportion basis over the lease terms; and
(d)
interest income, on an accrual basis using the effective interest rate method by applying the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or
a shorter period, when appropriate, to the net carrying amount of the financial asset.
EMPLOYEE BENEFITS
Share-based payments
(a)
Share option scheme
The Company operates a share option scheme for the purpose of providing incentives and rewards
to eligible participants who contribute to the success of the Group’s operations. Employees (including
directors) of the Group receive remuneration in the form of share-based payments, whereby employees
render services as consideration for equity instruments (i.e., “equity-settled transactions” under IFRS 2).
The cost of equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by an external valuer using a binomial model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled in employee benefit
expenses. The cumulative expense recognised for equity-settled transactions at the end of each reporting
period until the vesting date reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest. The charge or credit to profit
or loss for a period represents the movement in the cumulative expense recognised as at the beginning
and end of that period.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where
vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective
of whether or not the market or non-vesting condition is satisfied, provided that all other performance
and/or service conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if
the terms had not been modified, if the original terms of the award are met. In addition, an expense
is recognised for any modification that increases the total fair value of the share-based payments, or is
otherwise beneficial to the employee as measured at the date of modification.
